Energy-related convertibles move lower; other sectors hold in on swap; Depomed drops

By Rebecca Melvin

New York, Jan. 11 – U.S. energy convertibles traded down on Monday as the sell-off in crude oil prices continued, but most other convertible paper traded mostly in line on a dollar-neutral, or hedged, basis, market players said.

“Energy was a little bit lower, but everything else was mostly in line,” a New York-based trader said.

The sell-off in crude oil prices worsened, with the close for West Texas Intermediate crude oil for February delivery dropping another $1.75, or 5.3%, to $31.41 per barrel. With the new year a little more than a week old, oil is down nearly 15%.

Among energy names Cobalt International Energy Inc.’s convertible bonds were notably busy and lower. Cobalt shares traded down 8% amid no particular news except that the energy space overall was weaker.

Whiting Petroleum Corp.’s 1.25% convertibles traded down several points to 62 while shares of the Denver-based oil and gas exploration and production company closed down 49 cents, or 6.3%, at $7.28.

But a smaller name, Hornbeck Offshore Services Inc., was quiet, a New York-based trader said, while shares of the Covington, La.-based provider of offshore supply vessels fell 60 cents, or 7%, to $7.80.

Elsewhere, DepoMed Inc.’s 2.5% convertibles due 2021 slipped about 4 points to below par, according to Trace data, with shares of the Newark, Calif.-based specialty pharmaceutical company lower by about 4.5% to $14.74 last.

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